Major switch in pension planning for self employed pleases FSB

FSB
Mike Cherry

Champion of the self-employed the Federation of Small Businesses has been encouraged to see developments in the way the self-employed can monitor their pensions.

Minister Amber Rudd has unveiled proposals to support industry to deliver free, user-friendly services showing people their pensions information online.

She says savers will be in the driving seat with all the facts and figures about their pensions and potential retirement income at their fingertips in one place for the first time – on smartphones, tablets and computers. “With record numbers saving for retirement as a result of our revolutionary reforms, it’s more important than ever that people understand their pensions and prepare for financial security in later life.

“Dashboards have the potential to transform the way we all think about and plan for retirement, providing clear and simple information regarding pension savings in one place online. I’m looking forward to seeing the first industry dashboards later this year.”

Key details of the government’s plans, published today in its response to a consultation on dashboards, include:

  • a commitment to bring forward legislation at the earliest opportunity to compel all pension providers to make consumers’ data available to them through a dashboard
  • an expectation that the majority of schemes will be ready to ‘go live’ with their data within a 3 to 4 year window
  • confirmation that State Pension information will be included as soon as possible
  • dashboards will help to reconnect people with ‘lost’ pension pots, benefitting savers and providers

FSB National Chairman Mike Cherry said: “With Brexit absorbing so much Westminster bandwidth, it’s encouraging to see the Government reiterating its commitment to pensions dashboards in the strongest possible terms.

“Fewer than one in three sole traders are saving into a private pension. If we fail to increase that proportion imminently, we’re storing up serious problems for the future. Comprehensive, user-friendly pensions dashboards are one important way to encourage the self-employed to think seriously about retirement plans.

“The Government’s commitment to compel pension schemes to share data with platforms through primary legislation is particularly welcome. Without that, the whole initiative could end up being a damp squib.

“Some urgency is now required, and we question the three to four year timeframe for schemes to prepare data for dashboards. The Government’s own response accepts that The Pensions Dashboard Prototype Project has already done the heavy-lifting where developing the necessary tech is concerned. It’s interesting to note that a lot of consultation respondents feel this timeframe is too generous.

“Hopefully once the Brexit impasse is resolved we can move back to addressing more critical domestic issues like this one, not least the UK’s late payment crisis, the spiralling costs of doing business and a regressive business rates regime.”